In economics, supply and demand are the two fundamental concepts that underpin the functioning of markets. Demand refers to the quantity of a good or service that consumers are willing and able to purchase at a given price over a given period of time. The demand schedule is a table that shows the relationship between the price of a good or service and the quantity of that good or service that consumers are willing and able to purchase at each price level.
Here’s a more detailed explanation of the demand schedule:
- Price:
The price of a good or service is the most important factor that influences demand. As the price of a good or service increases, the quantity demanded generally decreases, and vice versa. - Quantity Demanded:
The quantity demanded refers to the amount of a good or service that consumers are willing and able to purchase at a given price level. - Law of Demand:
The law of demand states that there is an inverse relationship between price and quantity demanded, all other things being equal. In other words, as the price of a good or service increases, the quantity demanded decreases, and as the price decreases, the quantity demanded increases. - Shifts in Demand:
Changes in factors other than price that affect demand can cause the entire demand curve to shift. These factors include changes in consumer income, consumer tastes and preferences, the availability of substitute goods or services, and changes in the overall size of the market. - Market Demand:
The market demand is the sum of all individual demands for a good or service. The market demand curve is obtained by horizontally adding the individual demand curves for all consumers in the market.
The demand schedule is an important tool used by economists to analyze the behavior of consumers in a market. By examining the relationship between price and quantity demanded, economists can identify the factors that influence demand and predict how changes in these factors will affect the market.